Pence Warns Mexico Tariffs Are Coming With More Talks Set Friday
One U.S. official said the most likely outcome is still that a 5% tariff goes into effect.
(Bloomberg) -- Vice President Mike Pence said the U.S. still plans to impose tariffs on Mexico next week, as American and Mexican officials planned further talks aimed at defusing a crisis between the two countries over the flow of undocumented migrants into the U.S.
Negotiations wrapped up on Thursday evening without an agreement, Mexican Foreign Minister Marcelo Ebrard said, adding that another round of discussions would take place on Friday in Washington to head off the tariffs.
“Tomorrow we are going to maintain these conversations, we don’t have yet an agreement but we are advancing in order to reach an agreement as we want,” Ebrard said as he left the State Department. “So tomorrow morning we are going to work in the, maybe, one of the last sessions in order to make an effort to have an agreement.”
The U.S. has been preparing a draft emergency order to allow President Donald Trump to proceed with the tariffs in the event that talks fail to satisfy his concerns on immigration.
At the same time, administration officials have considered delaying the tariffs to give Mexico time to prepare a solution, according to people familiar with the matter. Prospects of a delay helped the S&P 500 Index extend its advance.
Pence said he was encouraged by progress in the talks, but that more had to be done if the tariff threat were to be lifted.
“At this point the tariffs are going to be imposed on Monday,” Pence said in Pennsylvania. The vice president, who took part in negotiations on Wednesday, said he would talk to Trump later Thursday and over the weekend about Mexico’s proposals, including developments during a second day of talks Thursday.
President’s Decision
“I’m encouraged they came today with more but it will be a matter for the president to consider,” Pence said.
One U.S. official said the most likely outcome is still that a 5% tariff goes into effect. But the official said U.S. negotiators recognize that Mexico is taking the talks seriously and working quickly to address Trump’s concerns. If the 5% tariff is triggered but Mexico follows through on promises to crack down on migration, the duties could be short-lived, the official said.
Ebrard confirmed that his government has offered to send about 6,000 national guard troops to Mexico’s southern border with Guatemala to help stem migration as part of an agreement to avert the tariffs.
Before imposing tariffs on Mexico, Trump would need to declare a national emergency. Pence’s comments came after an afternoon meeting between U.S. and Mexican officials, who met again Thursday evening.
Mexico is asking for more time to negotiate over concerns the two sides won’t be able to reach agreement on the steps Mexico would have to take to avert the tariffs, one person said. Trump has said the tariffs would be enacted on Monday.
Trump is traveling in Europe this week. Pence and Secretary of State Michael Pompeo took part in discussions on Wednesday, but neither was present at meetings Thursday.
Ebrard said earlier Thursday that there were unspecified “advances” after meeting with officials at the State Department.
Mexico’s proposal to delay the implementation matches comments by top Republican lawmakers. Senate Majority Leader Mitch McConnell told administration officials that Trump should hold off on imposing the Mexican tariffs until the president can personally make his argument to Republicans in Congress, according to people briefed on the conversation.
Many Republican lawmakers have expressed misgivings over the decision and some have suggested that Congress could reclaim its tariff powers or hold up a new North American free-trade deal if the White House carries out its threat.
In an interview with Fox News that was broadcast on Thursday night, Trump said Republicans who have criticized his decision should be “ashamed” of themselves for undercutting the U.S. negotiating position.
“What they’re doing is they’re hurting a deal. They should be saying, we’re with the president, we’ll do whatever he wants to do, and Mexico would fold like an umbrella,” Trump said in the taped interview with Laura Ingraham. “Now I have these people, and I’m saying there’s some Republicans, too, I think they should be ashamed of themselves.”
Earlier in the day, Trump told reporters in France, where he spoke at a commemoration of the 75th anniversary of D-Day, that “we’ve told Mexico the tariffs go on” if no agreement is reached. “They have to step up to the plate.”
“If no agreement is reached, Tariffs at the 5% level would begin on Monday, with monthly increases as per schedule,” Trump tweeted Wednesday. “The higher the Tariffs go, the higher the number of companies that will move back to the USA!”
Trump last week announced a 5% tariff on all imports from Mexico unless the country takes “decisive measures” -- as judged by his administration -- to stem migrants entering the U.S. He said the tariffs would begin June 10 and scale up incrementally until they reach 25% on Oct. 1.
Mexico is the second largest source of U.S. imports after China.
Trump said in the Fox News interview that he’s not concerned about the impact of tariffs on a newly negotiated U.S.-Mexico-Canada trade agreement.
“I’m not worried about it because they need us, we don’t need them,” Trump said of Mexico.
--With assistance from Josh Wingrove, Nacha Cattan, Justin Sink and Nick Wadhams.
To contact the reporters on this story: Margaret Talev in Washington at mtalev@bloomberg.net;Jennifer Jacobs in Washington at jjacobs68@bloomberg.net;Eric Martin in Mexico City at emartin21@bloomberg.net
To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, John Harney, Colin Keatinge
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